“Human resources professionals need to be more strategic”

This is invariably the take-away from most HR conferences where senior HR leaders describe how they transformed HR and got their proverbial seat at the table.

How do HR professionals become more strategic? Do you need to get an MBA? Do you need to get more work experience? Do you need to do a stint outside HR? All of these might help, but the solution is much simpler.

All that’s necessary is to understand what “strategy” means and what “strategic thinking” entails. The good news is that this is not very difficult at all. In fact, we are all engaged in strategy and strategic thinking every day.

Too often, strategy is confused with any or all of the following: something important that only senior executives deal with; understanding the industry or the market; knowing the business; or business planning. Does this sound familiar?

The word strategy, as defined by the Oxford English Dictionary refers to the art of planning and directing overall military operations and movements in a war or battle or a plan of action or policy designed to achieve an overall aim.

The word is derived from the Greek word for “generalship.” How the battle is fought is a matter of tactics – as opposed to the terms and conditions that it is fought on and whether it is fought at all (which are matters of strategy).

Since business is about competition and requires planning, it’s no surprise that strategy is so important and why senior executives are focused on it.  And one can see why strategy would be important for HR in the “war for talent.”

However, making the leap to understanding – let alone conducting – overall business strategy or HR strategy can be daunting. Let’s take a step back and re-examine what strategy means and what strategic thinking requires.

It helps to first recognize that all of us practice strategy and strategic thinking every day – at work as well as at home. The trick is then to recognize the elements of strategy in order to be able to extend that practice in specific areas, such as HR.

Strategy becomes necessary when your actions affect others’ well-being and their actions affect your well-being. If there were only one firm in the world, it would not need to engage in strategy. The first element of strategy is the notion of players – people or entities who interact and whose actions have consequences for each other.

Strategy becomes relevant when there is competition among the players. The players are rivals in some sense or another. Players are trying to outdo their adversary who is trying to do the same to them. It is important to keep in mind that strategy allows room for co-operation and collaboration as well. Competition is the second element of strategy.

Strategy becomes interesting when there are choices and those choices involve trade-offs. It’s worth remembering that economics is all about choice – allocating scarce resources among competing ends. Choice is the third element of strategy.

Strategy becomes complex when there is uncertainty. Players don’t know what the other player or players want or what they will do. There may be uncertainty about the state of nature – will it rain today? Will interest rates be high? Will unemployment be low? Uncertainty is the fourth element of strategy.

Connected to the element of uncertainty is the notion of a future, or in other words, a time horizon or time-frame. Your actions will likely be different if you are going to be in business for just one fiscal year or in perpetuity. The time-frame is the fifth element of strategy.

Strategic thinking is now easier to explain. It involves recognizing the elements of strategy at play so as to act in a way that maximizes one’s own benefit or well-being – possibly, though not necessarily, at the cost of someone else’s benefit or well-being.

Think of getting better at strategy as enhancing your “strategic intelligence quotient” – your strategic IQ.  The science of strategic thinking is called game theory. This is a relatively young science – less than seventy years old – and has formalized the notions of strategy and strategic thinking.

Game theory formalizes the concept of strategy by providing some useful common terms and guidelines. It provides tools for thinking through strategic situations, allowing us to characterize the situations and employ proven strategies.

You practice strategy and strategic thinking every day with employees, line managers and C-Suite executives.

Improving your strategic IQ will help you manage risk, negotiate and make better and faster decisions.

When you get back to your office, identify the five elements of strategy at play in your most urgent business challenge and plan your course of action.


About thenelsontouch

Amit is the founder and managing director of Nelson Touch Consulting, a management consultancy that specializes in maximizing the return on human capital through strategy, incentives and analytics.
This entry was posted in Strategy and tagged , , . Bookmark the permalink.

One Response to “Human resources professionals need to be more strategic”

  1. A plea from the head of World at Work for HR leaders to be strategic: “Stop Waiting for a Seat at the Table; Call the Bloody Meeting!”


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